Tax Reform and Electric Co-ops

How will the new federal tax changes affect Great Lakes Energy?

They have very little impact on us because a not-for-profit electric cooperative does not pay federal taxes on its electricity sales.

For-profit investor-owned electric utilities (IOUs) pay federal taxes. Therefore, the federal corporate tax reduction will result in lower expenses and higher profits for them.

Thatโ€™s just one difference between the two business models. Another difference is what the companies do with their profits.

IOUs pay their profits in the form of dividends to shareholders/investors, who may not even be their customers. Electric co-ops, owned by the members they serve, donโ€™t have shareholders/investors. Instead, they return profits to their members in the form of capital credit refunds.

GLE returned over $10 million in capital credit refunds to its members this past December and over $66.4 million since 2003.

Thatโ€™s the cooperative difference.ย 

Share this post

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments

Grant Application

For security verification, please enter any random two digit number. For example: 18